8 Strategies to Increase Social Security Benefits

Advertiser disclosure You're our first priority. Everytime. NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its interactive tools, articles and other information are offered to you for free as self-help tools, and only for informational purposes. They do not intend to offer investment advice. NerdWallet is not able to guarantee the accuracy or applicability of any information with respect to your specific circumstances. The examples are hypothetical and we encourage you to seek personalized guidance from qualified experts on particular investment concerns. Our estimates are based upon past performance of the market, and past performance isn't a guarantee of future performance. We believe everyone should be able to make sound financial decisions without a doubt. While our website doesn't feature every company or financial product in the marketplace We're pleased that the advice we provide as well as the advice we provide and the tools we create are objective, independent simple, and free. So how do we make money? Our partners compensate us. This may influence which products we write about (and where those products appear on our site), but it does not affect our advice or suggestions that are based on many hours of study. Our partners cannot pay us to guarantee favorable reviews of their products or services. .

8 Strategies to Increase Social Security Benefits
Delaying your beginning date is one method to maximize your monthly return, however, other options are worth considering.
Written by Liz Weston, CFP(r) Senior Writer | Personal Finance, credit scores, economics Liz Weston, CFP(r) is a personal financial columnist, co-host of"Smart Money," the "Smart Money" podcast, award-winning journalist and writer of 5 books on money, including the bestseller "Your Credit Score." Liz has been on numerous national radio and television programs including"Today" show "Today" program "NBC Nightly News," as well as the "Dr. Phil" show, and "All things considered." Her columns are distributed in the media by The Associated Press and appear in hundreds of media outlets every week. Prior to joining NerdWallet she wrote for MSN, Reuters, AARP The Magazine and the Los Angeles Times. She shares a home located in Los Angeles with a husband, a daughter and a golden retriever who is a co-dependent.





Dec 21, 2022


Written by Rick VanderKnyff Senior Assigning Editor | Los Angeles Times; University of California, San Diego; Microsoft Rick VanderKnyff leads NerdWallet's news efforts and manages the team responsible in expanding NerdWallet content to cover additional subjects in personal finance.

Previously, he has worked as a channel manager at MSN.com and as a web manager at University of California San Diego, and as an editor for copy and staff writer at the Los Angeles Times. He holds an undergraduate degree of Arts in communication and a Master of Arts in anthropology.







A majority of the items featured on this page come from our partners who pay us. This affects the products we write about as well as the place and way the product appears on the page. However, this does not influence our evaluations. Our opinions are our own. Here's a list of and .
The information on investing provided on this site is intended for informational purposes only. NerdWallet does not provide advisory or brokerage services neither does it suggest or advise investors to buy or sell certain stocks, securities, or other investments.



MORE LIKE THIS


Understanding how to boost Social Security benefits is important because those checks will likely be the main source of your income in retirement.
Many people do not understand how Social Security really works. They apply too soon, do not receive on crucial benefits, and do not make use of strategies that could boost their lifetime income. The consequences of their mistakes could be as much as $250,000, researchers have estimated.
These are the eight methods you can increase the amount of your Social Security benefits.
In this article, and in this article and More


1. Refrain from submitting your application
Social Security retirement benefits grow by 5% to 7% every year you wait between the earliest claiming age of 62 and the retirement age at full retirement that is currently 2 months and 66, and reaching 67 for those born in 1960 and later.
The amount you earn is higher if you prolong your retirement past retirement age. Increase your payout by 8% for each year you hold off applying until you reach age 70, at which point the benefit is at its maximum.
A tip for the average person: You would be better off delaying their retirement in accordance with a huge body of research that takes into account longer life spans, prevailing rates of interest and survivors' benefits. Many financial planners encourage their clients to use other sources, like retirement funds, if that allows them to put off applying for.
2. Work longer
Social Security is based on the highest earning 35 years. You could be eligible to get more benefit being more productive if you can be able to replace one of your less-paid years with a better-paying one.
The people who were able to take time off to help raise families or otherwise had breaks in their employment could find working longer to increase the amount of benefits they receive. (Note that if you begin Social Security early, continuing to work may temporarily decrease your benefits.) In addition, a woman's salary is more likely is higher than that of a male later in life, increasing the possibility of getting paid if you continue to work.
Pro Tips: If you begin Social Security early, your benefits will be cut by $1 for every $2 you earn over an amount that is capped, which is $21,240 in 2023. The earnings test will end at your full retirement age It's recommended to wait until you reach this age to start applying.
3. Earn more
Another way to increase your future Social Security payment is to max out your earnings for as long as you can. "Maxing out" in 2023 means that you've made $160,200 or more which is the highest amount of income that is subject to the 6.2% Social Security payroll tax. If you max out throughout your 35 highest-earning years, you'll qualify for the maximum Social Security benefit at your full retirement age. That's $3,627 per month in 2023.
A tip for self-employed individuals will attempt to minimize the amount of their income tax-exempt however, that strategy could be a problem when the time comes to apply for Social Security. A little bit of extra tax in the short term can pay off in the form of a lifetime stream of higher and inflation-adjusted earnings.
Advertising
NerdWallet rating is made by our editorial staff. The scoring system for online brokers and robo-advisors is based on taking into consideration more than 15 aspects that include account fees and minimums, investment options as well as customer support and mobile app functionality.


NerdWallet rating is made by our editorial staff. The scoring formula used for online brokers and robo advisors takes into consideration more than 15 aspects that include account fees and minimums, investment choices as well as customer service and mobile app capabilities.


NerdWallet rating is determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into consideration more than 15 aspects, including account fees and minimums, investment options as well as customer service and mobile app functionality.


Fees of $0 per trade for online U.S. stocks and ETFs

Charges $0.005 per share As the lowest to $0.0005 with volume discount

Fees $0 per trade

Account minimum $0

Account minimum $0

Account minimum $0

Promotion Get $100 when you create an account with Fidelity that is eligible for a new account with $50 or more. Enter code FIDELITY100. Limited time offer. Terms and conditions apply.

Promotion Exclusive! US resident opens a new IBKR Pro individual or joint account. You will receive 0.25 percent rate reduction on margin loans. Tiers apply.

Promotion: Up to $600 when you make an investment into a new Merrill Edge(r) Self-Directed Account.






4. Consider your spouse
Some lower-earning spouses could get more from taking a spousal benefit than from getting their own retirement benefit. Spousal benefits could be up to 50% of what the higher earner earns at her complete retirement. The amount is discounted if started early. The spouse with the highest earnings needs to be receiving an income-based retirement benefit from the other spouse to receive the spousal benefits. In the past, people with higher incomes could "file and then suspend" to let their own benefits grow but it's not an option.
When you submit your application, Social Security will compare the benefits of your spouse against your own retirement benefits and give you the larger of both. In the majority of cases, you won't be able to transfer from an spousal benefit to your own benefit later regardless of whether your benefit is greater. (People born before Jan. 2 1954, are given the option of filing the "restricted applications" for benefits related to spousal support only and then switching to their own benefit later.)
Couples should also take into consideration survivor benefits when making Social Security decisions. If one spouse dies the survivor will start getting only one check, the larger than the other two check the couple was receiving. The decrease in income resulting from the lost check can be significant. Couples can help mitigate the harm by making sure that the remaining check is as big as it can be. That typically requires having the one with the highest income delay the beginning of Social Security typically at a minimum until retirement age.
A tip for you: Coordinating benefits with your spouse can become complicated. Consider using an Social Security claiming calculator to consider your options. There's a no-cost version available on the AARP site and you can also purchase more advanced version at Social Security Solutions ($20 and up) or Maximize My Social Security ($39 and up).
5. Investigate divorced spouse benefits
If you're not married but your previous marriage was for at minimum 10 years, you could qualify for spousal benefits based on your ex's work history. The amount can be up to 50% of the worker's benefit at his or her fully retired age. If you decide to remarry the divorced spouse benefit stops. You must be 62 to get spouse benefits.
If your ex has died and the marriage lasted at least 10 years, then you might be eligible for survivor benefits that can be as high as 100% of the ex's benefit. Remarrying at 60 or more (or 50 or more if disabled) and still receive benefits from divorced survivors. Survivor and divorced survivor benefits can begin at age 60, or 50 if the survivor is disabled, or at any age if you're caring for your ex's child younger than 16 or has disabilities (and in that situation, the 10-year marriage requirement is waived). Survivors may change to their own benefits later if that's larger or more substantial, and vice versa.
Pro advice: Your ex-spouse must be at or above 62 for you to qualify for divorced spousal benefit, but does not need to receive his own benefits. (That's different in spousal benefits for regular spouses, that typically will require the main worker to submit prior to the spouse can receive anything.) Survivor benefits are determined by what your ex was getting or could have received when they reached full retirement age. (If the ex delays starting benefits beyond full retirement age, the survivor's benefits are enhanced by the delays in retirement benefits.) If you start benefits before your full retirement age however your benefit will be reduced.
6. Add your minor child
If you're a recipient of Social Security retirement or disability benefits, your child could be entitled to an additional check. An unmarried minor child can receive up to 50 percent of the primary employee's disability or retirement benefits. The child benefit usually ends at 18, but can continue to age 19 if the child is still in high school. Benefits for children are available for those who are 18 or older if they are disabled and the disability began prior to the age of 22.
There is a "family maximum" which limits the amount families can earn on the basis of one worker's earnings record. The maximum amount is between 150 188% and 150 percent of the worker's monthly salary at full retirement age. If your family's total benefits exceed the maximum, the worker would continue to receive a check that is not reduced, but checks for dependents would be proportionately reduced.
Pro tip The benefits for families, including spouse and child benefits will be evaluated by Social Security's earning tests and can be reduced or removed if the primary worker starts benefits early and continues to work.
7. Suspend your benefit
If you began Social Security early and decided that was a mistake, you can suspend your benefit once you attain . That will allow your benefit to accrue credits for delayed retirement that increases the amount you get by 8% every year you delay until age 70, at which point your benefit reaches its maximum. There is no obligation to pay back the benefits you've earned.
In addition, if you stop your benefits, it does not affect the benefits of anyone else receiving benefits based on your employment history, such as spouses or minor child. The possible increase in your earnings might not cover the loss of benefits for your dependents.
Pro tip A few times Social Security workers incorrectly tell that they can't take benefits off. If that is the case take them to this webpage on the site.
8. Make a second attempt
If you change your mind within a year after applying to Social Security, you can make a withdrawal and pay back everything you've earned in benefits. That will restart the clock on your benefits , so that you'll get the 7% to 8% annual increase due to delay in your application. This can only be done once per lifetime and you aren't allowed to withdraw your application after 12 months.
Pro tip: Removing your application is distinct from suspending your benefit. You may suspend your benefits either in writing or verbally at anytime after reaching full retirement age. To withdraw, you must complete Social Security Form SSA-521 within a year from the date of application and pay an amount equal to all benefits you and your family have received, including any Medicare premiums withheld from your paychecks.


About the author: Liz Weston is a columnist at NerdWallet. She is a certified financial planner and author of five books on money including "Your Rating Score."







In a similar vein...
Find a more reliable broker
View NerdWallet's picks for the best brokers.














Dive even deeper in Investing






Find out more money-saving strategies - straight to your inbox
Sign up and we'll send you Nerdy articles about the money topics that matter most to you and other ways to help you earn more from your money.

Should you loved this information along with you want to acquire more details relating to up to $255 california online payday loans generously go to our web site.